Key facts
- Easyjet shareholders who retain their stake in the airline post-Apollo takeover risk dilution and are unlikely to receive dividends.
- Rolled-over shares will be subordinated, enabling Apollo to receive a 14% annual dividend on its stake.
- Non-EU investors' stakes may be compulsorily redeemed to comply with EU airline ownership rules.
- Apollo and its affiliates are exempt from compulsory transfer and buy-back provisions.
- Shareholders will lose input on director appointments and group investment decisions.
- The deal will load Easyjet with over £3bn in debt, prompting Moody's to place the airline's rating under review.
Easyjet shareholders face significant dilution of their rights and a likely absence of dividends if they choose to retain their investment following the airline's £5.7bn takeover by Apollo. Filings reveal that shares rolled over into the new ownership structure will be subordinated, allowing Apollo to pay itself a substantial annual dividend without distributing cash to other shareholders.
Furthermore, non-EU investors risk having their stakes unilaterally seized by Easyjet's new management to ensure compliance with the bloc's strict airline ownership rules. However, Apollo and its affiliates are explicitly exempted from these compulsory transfer and buy-back provisions.
While shareholders will retain voting rights at general meetings, their influence will be curtailed as they will not have input on director appointments or group investment decisions. Both Apollo and Easyjet founder Stelios Haji Ioannu, who hold stakes above a 20% threshold, will control these key areas.
The deal's fine print is drawing increased scrutiny, particularly as it emerged that Easyjet will be burdened with over £3bn in debt used by Apollo to finance the transaction. This leveraged buyout could lead to a downgrade in the airline's credit rating, with Moody's already placing its rating under review due to uncertainty surrounding the future capital structure.